Israel to build 1000 more settler homes in West Bank

8.10am

JERUSALEM - Prime Minister Ariel Sharon, facing a party mutiny over his plan to quit the Gaza Strip, has approved 1000 more Israeli settler homes in the West Bank in a move that drew a cautious response on Tuesday from Washington.

The package of invitations to contractors to bid on the housing projects had been shelved several weeks ago to avoid possible discord with Israel's main ally, whose Middle East peace "road map" prescribes a freeze on settlement building.

But Housing Minister Tzipi Livni said the construction bids would adhere to "understandings" with Washington that new homes could be erected within current settlement boundaries.

US officials said the United States was studying details of the tenders before passing judgment.

"Our concern is to determine whether these tenders are consistent with the government of Israel's previous commitments on settlements," State Department spokesman Adam Ereli told reporters.

He denied there was a tacit agreement with Israel in which the United States would accept some settlement activity despite the road map accord.

Sharon confidants said the prime minister was trying to blunt resistance within his right-wing Likud party over his US-endorsed plan to "disengage" from conflict with Palestinians by evacuating all 8000 Jewish settlers from Gaza.

He faces a snap Likud convention on Wednesday at which party nationalists hope to vote down his proposed alliance with the dovish Labour party, a fervent proponent of withdrawals.

"Sharon may only need these tenders for the next 24 hours, for the convention. Afterward, who knows, he could freeze them again ... He is merely doing what he must to proceed to disengagement," one confidant said.

One reason for the light US response to the housing bids was there was speculation within the Bush administration that Sharon needed the move for his short-term political needs and might not follow through on it, one US official said.

"I guess we are soft. Frankly, we just don't know how serious this is and whether it's something where we are at the point that we need to get on a soapbox. Maybe we will," said a State Department official, who asked not to be named.

Sharon's aides said he would pursue his Gaza plan with a "unity" coalition however the non-binding Likud vote panned out.

He is confident anti-withdrawal activists in Likud will stop short of thrusting him into early elections over a plan that has commanded solid majorities in opinion polls, analysts said.

Sharon wants Labour by his side to prevent Likud hardliners blocking cabinet and parliamentary votes on phasing in the Gaza withdrawal. Coalition talks have become bogged down over Labour's demand for more social spending in 2005.

But Labour leader Shimon Peres, keen for a unity coalition, said he had no intention of compounding Sharon's difficulties.

"I don't know what will happen at the Likud convention, but if Ariel Sharon continues with disengagement, we won't be the ones to cause the opportunity to be wasted," he told reporters.

Sharon sees Labour as the linchpin for restoring a parliamentary majority lost when far-right coalition partners defected or were sacked in June for bucking his Gaza blueprint.

Palestinian leaders and Israel's settlement watchdog group Peace Now accused Sharon of riding roughshod over the road map in sanctioning a new flurry of settlement-building.

But Israeli officials have privately written off the violence-torn road map, which envisages a viable Palestinian state in the West Bank and Gaza.

- REUTERS